Oil and water interests clash over disposal wells

BY NEENA SATIJA, TEXAS TRIBUNE

In the heart of Texas’ mineral-rich Eagle Ford Shale, freshwater isn’t the only precious resource for both oil companies and local communities. Brackish groundwater aquifers are also becoming increasingly valuable — as potential drinking water supplies, and also as locations for disposing wastewater from drilling and hydraulic fracturing.

The tug-of-war between the two interests could come to a head Thursday. That’s when Marathon Oil Company — backed by its industry peers — will argue in front of the Railroad Commission of Texas that groundwater conservation districts should not be allowed to challenge disposal well permits.

Marathon says that the districts have no such authority under Texas law and are creating regulatory uncertainty.

Districts say they fear that losing their ability to protest would mean less scrutiny for wastewater wells that could contaminate future drinking water supplies. Thousands of such disposal wells exist in Texas today, and they are proliferating; in 2013, the Railroad Commission approved 668 permits for disposal wells, doubling the number of approvals in 2009. Groundwater district managers have long worried about the potential impact of those wells on both brackish and freshwater aquifers.

“This is potentially a big issue because it could be precedent-setting,” said state Sen. Troy Fraser, R-Horseshoe Bay, the chairman of the Senate Natural Resources Committee. Fraser criticized Marathon’s position, saying that state law does give groundwater districts authority to challenge well applications through contested-case hearings – drawn-out processes resembling trials, which are held before an administrative law judge.

The case has its roots in Gonzales County, which sits atop the Carrizo-Wilcox aquifer, a long-stretching source of fresh and brackish water that folks in South Texas covet.

“We’ve got a bull’s eye on us,” said Greg Sengelmann, general manager of the Gonzales County Underground Water Conservation District. “Everybody wants water from our district.” Now that cities like San Antonio are pulling water out of the Carrizo-Wilcox’s brackish portion and treating it to potable standards, Sengelmann said it’s important that the district make sure its brackish portion is protected along with the freshwater portion.

So the district, along with many others in South Texas, is protesting nearly every permit for a new wastewater well in front of the Railroad Commission unless companies agree to install them more safely. The idea is not to end their construction altogether, Sengelmann said, but to seek safeguards beyond what the Railroad Commission currently requires, including better cement casing to prevent wastewater from migrating into drinking water supplies.

That’s what the district sought for Marathon’s well. But the parties failed to reach a compromise, and Marathon asked the Railroad Commission to throw out the complaint, alleging that the district did not meet the threshold of being a person or a local government “affected” by the well.

That’s partly, the driller said, because the well lies four miles outside of the district’s boundaries. But Marathon also argues that no groundwater district meets the threshold, because the Railroad Commission alone has the authority to protect groundwater from potential contamination from oil and gas activities. The ability of groundwater districts to protest wells undermines the Railroad Commission’s rules, “creating uncertainty and added costs for applicants,” Marathon argues.

A hearing examiner for the Railroad Commission rejected Marathon’s argument. It said the groundwater district was not interfering with the application but “merely trying to be heard at the commission.” The company appealed, and on Thursday morning, the three railroad commissioners will take up the issue.

Groundwater districts say that a vote in favor of Marathon could put water supplies at risk.

“There’s so damn many of these things, particularly in the Eagle Ford Shale,” said J.D. Head, an Austin-based attorney who represents the Wintergarden Groundwater Conservation District, which encompasses Dimmit, Zavala and LaSalle counties.